1-3. Tangerine Company and Mr. Orange organized Citrus Corp. with authorized voting common stockof $300,000. Tangerine Company contributed $45,000 cash. Both Tangerine Company and Mr. Orangetransferred other property in exchange for Citrus stock as show below. Mr. Orange received $10,000cash in addition to stock.Adjusted Basis$37,500$97,5001. What is Tangerine Company's basis in Citrus stock?A. $37,500B. $120,000C. $75,000Tangerine CompanyMr. OrangeFair Market Value % of Citrus stock acquired$75,000$190,00040%60%D. $45,000E. $82,5002. What is Mr. Orange's basis in Citrus stock?3. What basis does Citrus take in the property transferred by Mr. Orange?

1. Tangerine company basis in citrus stock = $300,000*40%= $120,000 So, correct option is - B)…

Answered: 1-3. Tangerine Company and Mr. Orange…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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